fML Reviews: Aviva MyLifeInvest

Aviva MyLifeInvest Review

Investment-linked policies, or ILP, are policies that features both investment and protection components. It’s often marketed as a plan that is flexible and is tailored for your needs. It also has high returns, in exchange for high risks. In this article, fundMyLife examines the features of Aviva’s only ILP, MyLifeInvest, and reviews it.

What is it?

Aviva MyLifeInvest is a regular premium ILP. It provides a lifetime coverage for death and terminal illness. It also provides coverage for total and permanent disability (TPD) until age of 70.

Noteable features

#1 Benefits when life-stage events happen

When you reach a new life-stage, you can raise your sum assured without a medical checkup. According to Aviva, it means a change in marital status, childbirth/new addition to the family, i.e. adoption, and approval of mortgage. Bear in mind you’ll have to apply within 3 months of the mortgage approval. On top of that, your change in life-stage requires proper documentation and evidence for the adjustment of benefits.

#2 Reducing coverage

Besides life-stage events where you increase your coverage, you can also reduce your coverage as well. In fact, you can even reduce your coverage to zero to maximize investments. However, you can only do so if either you reach 55 years old, or you have paid at least twelve years’ worth of premiums. On other other hand, increasing the sum assured after reducing it is subjected to medical underwriting.

#3 Riders

This product has several riders available:

  1. Level Term Cover – additional protection against death and terminal illness
  2. Early Critical Illness Cover – covers earlier stages of critical illness on top of regular ones
  3. Critical Illness Additional Cover
  4. Critical Illness Accelerated Cover
  5. Level Term Critical Illness Accelerated Cover
  6. Payer Critical Illness Premium Waiver Benefit
  7. Payer Premium Waiver Benefit
  8. Critical Illness Premium Waiver

In general the riders are categorized into three kinds: 1) enhanced coverage of death and TPD, 2) critical illness coverage, for both early and normal, and 3) premium waivers in the case of sickness or accidents.

Insurance cost

Turns out the product summary is not available publicly online. However, we contacted kind advisers from Aviva for a copy of the MyLifeInvest product summary. From there, we obtained more details on the insurance coverage charge for death, TPD, and critical illness riders separately.

#1 Death benefit

MyLifeInvest death charges
How much you need to pay per year for each $1,000 sum assured. Data obtained from MyLifeInvest product summary.

We observe that the coverage amount is relatively low until early 50s which then starts rising exponentially. Interestingly, the rates are not too different for male and female non-smokers and smokers.

#2 TPD

Aviva MyLifeInvest TPD Graph
The amount of money you need to pay each year per $1,000 coverage for TPD. Data obtained from MyLifeInvest product summary.

The charge for TPD is relatively low for the first 40 years of age, which then increases exponentially thereafter. However, the range of the amount is small, with the maximum of $7/$1000/year.

#3 Critical illness

Aviva MyLifeInvest CI graph
The yearly insurance charge for critical illness per $1,000 coverage. Data obtained from MyLifeInvest product summary.

The insurance charge for critical illness has a similar range to death, with the premiums mostly very low until the age of 50. After that, the premiums go up very quickly.

fundMyLife reviews

As observed from the charts above, the premiums for death, TPD, and critical illness are relatively low for the first 50 years of age. The charges then increase exponentially thereafter. As such, this plan is useful earlier in your life as a means of cheap protection, not unlike term plans.

The option to minimize your coverage, and at some point to zero, is useful if you want to focus on your investments. Who is it for? We think it’s good for people who want to invest but needs a lot assistance – preferably together with a financial adviser who knows what he or she is doing. It requires active monitoring since insurance cover charge increases over time leaving you less to purchase units in funds.

While we obtained a copy of the product summary, there were several details missing such as the specifics for some of the riders, e.g., premium waiver conditions, early critical illness charge, etc. As such, you will have to contact the representatives for more information. However, based on our intuitive understanding of the rider names, think MyLifeInvest is a relatively modular ILP compared to the others out there. This is probably because MyLifeInvest is the only ILP from Aviva, which means it has to be very flexible to cater to as many people as possible.

Ask fundMyLife financial questions today!

That’s all folks! We hope you found the review useful and got more detailed information on what MyLifeInvest is all about.

If you’re still unsure about what you need, why not head on over to fundMyLife and ask our curated pool of financial advisers? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

fML Reviews: NTUC Income VivoLink

NTUC Income VivoLink Review

Investment-linked policies, or colloquially know as ILPs, are policies that combine both protection and investment. Its main draw lies in its flexibility and potential high returns, which comes with high risks as well. NTUC Income offers two ILP products: VivoLink and VivaLink.

We know what you’re thinking. No, VivoLink is not the name of the bridge to VivoCity. VivoLink is the sibling investment-linked plan (ILP) of VivaLink, which we reviewed in our previous article. In this article, fundMyLife examines NTUC Income VivoLink’s features and reviews it.

Disclaimer: we are neither endorsing nor hating on these products, nor ILPs in general. We believe that there’s a time and plan for everyone. As such, it is all the more important that consumers are aware of the pros and cons of these products.

What is it?

VivoLink is a regular premium ILP.  The plan pays the basic benefit or cash-in value (whichever is higher) in the event of death or total and permanent disability (TPD) before the age of 70. VivoLink also pays the basic benefit or cash-in value in the event of diagnosis of dread disease, or critical illness.

The death benefit depends on your age range when you die, i.e. the younger you are the higher the payout is. In the case of accidental death or TPD, the amount received is higher compared to the same age bracket. Restrictions apply to accidental deaths and TPD, i.e. you’d get a lower payout if risky activities or occupations caused the death or TPD.

Notable features

This is a list of selected features of the plan that we thought were interesting/unique. Other information like calculation of benefits can be found here.

#1 Retrenchment benefit

One thing that stood out in the plan was the retrenchment benefit. If you have not been able to find employment for three months, you can choose not to pay the premiums for a maximum of 24 weeks. Your coverage is not affect during this. Note: you must have paid a minimum of six months’ premiums.

#2 Extensive range of funds

One draw is that you can choose from a wide range of funds. You can invest in as many funds as you need to, provided that you can set aside a minimum amount for each fund that you put in. Choosing VivoLink also gives you access to NTUC Income’s very own Aim Series. The Aim Series funds are a mix of equities, bonds, and alternative assets such as commodities and property. It is composed of five different funds: 1) Aim Now, 2) Aim 2025, 3) Aim 2035, and 4) Aim 2045. As its name suggests, you can choose the fund based on the target year that you need it. For example, if you want the money in 2045 you choose Aim 2045. Besides the amount of time, the funds also differ in risk profiles. Aim Now has the lowest risk profile whereas Aim 2045 has the highest.

#3 Policy loan

As opposed to its sister plan VivaLink, you can apply for a policy loan if you are unable to pay the premiums. The current policy loan amount (as of May 2018) is either 50% of the total cash value of the policy, or 80% of the net investment amount – whichever is lower. The interest rate of the loan is set at 5.5% p.a. If the amount of the loans and interest is more than the cash value of the policy, all benefits will stop.

Insurance details

NTUC VivoLink Premium
The minimum and maximum premium per unit time. Table adapted from https://www.income.com.sg/NTUCIncome/CMSTemplates/PrintFaqs.aspx?pId=7672

There is no discount for paying annually, and as such for cash flow purposes it might be a good idea to go for monthly payment instead of yearly where you pay a lump sum.

VivoLink Review

The retrenchment benefit is useful for those who stand a high chance of retrenchment/unemployment. PMETs are at high risk of being retrenched. While older professionals are at risk of being retrenched, younger workers are not spared as well. Besides the retrenchment benefit, VivoLink has other features that allow temporary respite for customers who cannot pay the premiums. For example, policy loans help deal with the matter temporarily. It’s a crutch, and it’s dangerous to depend too much on a crutch.

One thing – there are no riders available for this plan. However, the plan does cover death, TPD, and dread disease/critical illness. Compared to other plans, dread disease/critical illness usually comes as a rider to a main life insurance plans. While there is dread disease/critical illness coverage, you do not have the option of adding an early critical illness rider. You will have to supplement it with other early critical illness plans out there. In addition, riders that waive premiums are also unavailable so you must take note of that too.

All in all, VivoLink is relatively more flexible in investment due to a larger pool of funds, but is less so for protection compared to its sibling ILP. The critical illness coverage in the base plan offsets the lack of riders.

Fun fact: Muslims can consider NTUC Income’s offerings because NTUC handles Shariah-compliant funds in Singapore. The Takaful Fund is one of the special funds in NTUC Income that invests in global equity markets via Shariah-compliant instruments.

Conclusion

That’s all folks! We hope that you understand VivoLink a bit better now. It is an interesting product that may or may not suit you, depend on your financial planning portfolio.

However, if you’re still unsure what you need, why not head on over to fundMyLife and ask our curated pool of financial advisers? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

fML Reviews: NTUC Income Vivalink

NTUC Income VivaLink Review

Investment-linked policies, or colloquially know as ILPs, are policies that combine both protection and investment. Financial advisers (or at least errant ones) often promote these to consumers as a way to have the best of both worlds. It’s a controversial plan, with plenty of threads on forums cautioning people of its lack of utility.

In the previous comprehensive list of ILPs in Singapore, we briefly reviewed NTUC Income’s ILP offerings – VivoLink and VivaLink. In this article, fundMyLife takes a closer look at one of these two policies, VivaLink and reviews it.

Disclaimer: we are neither endorsing nor hating on these products, nor ILPs in general. We believe that there’s a time and plan for everyone. As such, it is all the more important that consumers are aware of the pros and cons of these products.

What is it?

VivaLink is a regular premium ILP. In the event of death or total and permanent disability (TPD) before age 70, the plan pays the basic benefit or cash-in value, whichever is higher, minus any applicable fees and charges. In the case of death or TPD due to an accident, you will also receive an additional 100% of the sum assured or $100,000. However, the additional money might be lower if certain risky activities are responsible for the accident.

Noteable features

This is a list of selected features of the plan that we thought were interesting/unique.

#1 Guaranteed insurance coverage in the first 10 policy years

A relatively attractive draw, since you’ll never know what might happen to you in the next 10 years.

#2 Additional riders

  1. Dread disease cover: dread disease is another term for critical illness, and if the insured individual diagnosed with such a disease he or she is paid the sum assured.
  2. Dread disease premium waver: The rider waives future premium payments for VivaLink if you are diagnosed with any of the dread diseases.
  3. Payor premium waver: If the insured person is not you – the policyholder and payor – and you die or experience TPD, future premium payments are waived.
  4. Enhanced payor premium waver: Similar to payor premium waver, except the waiver happens when/if you are diagnosed with dread disease as well.

#3 Benefits when life events happen

One notable feature is the ability to increase coverage without medical assessment when you enter new life events and/or receive additional units for increase in regular premium. NTUC Income defines life events as “turning 21 years old, getting married, purchasing a residential property or becoming a parent.”

There are a few more features that we observed, but were self-explanatory. For example, bonus allocation of units in the 15th and 20th policy year. There’s also a retirement option that allows you to reduce insurance coverage to $0 from 55 years old onwards to maximize wealth accumulation.

Insurance charge

We here at fundMyLife love data. As such, it was fortunate that we found information on the yearly insurance charge for death and TPD for each $1,000 insured. Based on the data, it seems like the most important factors are sex and smoking status.

VivaLink premium graph
The annual insurance charge for death and TPD. Source: https://www.income.com.sg/forms/policy-conditions/vivalink.aspx?ext=.pdf

Based on the graph above, the yearly insurance charge for death and TPD becomes exponential after you’re 40 years old. Unsurprisingly, male smokers pay the most, followed by female smokers, male non-smokers, and finally female non-smoker. Female smokers and male non-smokers pay about the same for the annual insurance charge for most of the time.

VivaLink Review

As observed from the graph above, VivaLink is good for a relatively cheap death and TPD protection for an early part of your life. With the additional riders, you can also enjoy critical illness coverage and premium wavers in case of any mishaps.

The life event feature was interesting because of the acknowledgement that an individual’s needs change over time. This feature is useful because you require additional medical underwriting when you want to increase your insurance coverage. In addition, there’s no change in the monthly premium if you exercise the first option to increase coverage.

The extra dread disease/critical illness rider is useful, but there is no rider for early critical illness. For that, you will have to purchase a separate plan. In general, this plan is a useful plan if you are confident that you will enter/can enter the stated life events.

Fun fact: Muslims can consider NTUC Income’s offerings because NTUC handles Shariah-compliant funds in Singapore. The Takaful Fund invests in global equity markets via Shariah-compliant instruments.

Conclusion

That’s all folks! We hope you found the review useful and sheds more light into what VivaLink is all about.

If you’re still unsure what you need, why not head on over to fundMyLife and ask our curated pool of financial advisers? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Think You Know An ILP When You See One? Think Again.

list of ilp

Investment-linked policies (ILP) are policies that contain both investment and protection components. It is a popular form of insurance sold; Life Insurance Association reports that around 20% of this quarter’s new policies are from ILPs alone. The flexibility is attractive and is certainly attractive for those who want their cake and eat it too.

However, based on the questions that come in through fundMyLife, it seems that our users often unwittingly purchased an ILP. It could be a miscommunication between the adviser and the user, but usually the realization happens a little too late. We here at fundMyLife are a curious bunch, and wonder why this is the case. We previously wrote about why people might have ended up with an ILP.

In this article, fundMyLife lists the different ILPs available in Singapore by company, and comments on how innocuous the names sound. You might own one of these and may or may not know it – check it against this list of ILP and find out! Names form the first impressions, so we’ll be looking at it and judge if the plan sounds obvious that it is an investment-linked policy.

Note: this list is accurate as of May 2018. Also, we’re writing this in a tongue-in-cheek manner so please no suing us over this list of ILPs 🙁

AIA

ILP Names

  1. AIA Pro Lifetime Protector
  2. AIA Pro Achiever
  3. AIA Asset Builder
  4. AIA Platinum Pro Secure
  5. AIA Asset Growth
  6. AIA Wealth Builder

fML Comments

AIA is a star in this list, with six ILPs offered. According to old lists of ILPs, they actually have more than that – two more for a total of eight plans in fact. Currently. two of the plans (Pro Lifetime Protector and Platinum Pro Secure) participate in AIA’s wellness benefits program, AIA Vitality, so that’s pretty sweet.

One of the main differences between the plans is how your money is invested. More specifically, the difference lies in where your money is taken from. For example, AIA Asset Growth and AIA Wealth Builder use money from your SRS account, whereas AIA Asset Builder uses money from your CPF. However, we notice that the names do not suggest anything that it might be a linked policy, which may confuse blur people.

Great Eastern

ILP Names

  1. Smart Invest
  2. Smart Life Advantage

fML Comments

Great Eastern has only two ILPs, but with names that don’t say “ILP” from the first glance. Smart Life Advantage is more flexible between the two, allowing adjustment between protection and investment any time. Furthermore, you can add riders to Smart Life Advantage for personal accident, critical illness and early critical illness cover. As such, think of Smart Invest as the starter pack of ILP, from Great Eastern. 2/5 for the names alone.

Manulife

ILP Names

  1. InvestReady
  2. Manulink Investor
  3. Manulink Enrich

fML Comments

The naming of the products of Manulife’s ILPs is good, with two out of three with the word “link” in its name. One big difference between Manulink Investor and Manulink Enrich is that the former is a single-premium plan whereas the latter is a regular premium one. We wrote about the aspects of premiums here. InvestReady is relatively more comprehensive than the other two, with extra features like automatic fund rebalancing and regular income when you opt for dividend-paying unit trust funds.  Since the former is a single-premium plan, you’ve the option to use CPF and SRS accounts to pay for it.

All in all, we give Manulife 4/5.

AXA

ILP Names

  1. AXA Wealth Treasure
  2. Pulsar
  3. INSPIRE Duo
  4. INSPIRE FlexiProtector
  5. INSPIRE FlexiSaver

fML Comments

Coming in second with five ILPs is AXA. AXA Wealth Treasure is the most comprehensive ILP in the list, but also a slightly higher premium per month compared to INSPIRE FlexiSaver and INSPIRE FlexiProtector that require SGD100/month. INSPIRE Duo is a single-premium plan which lets you pay using either cash, CPF, or SRS.

Another notable feature we observed was that AXA Wealth Treasure and Pulsar allowed for Life Replacement Option (LRO). It is an option that replaces the life assured of the plan with an immediate family member. This allows legacy planning – a beast of a topic for another day. We haven’t seen this feature explicitly stated in other companies’ plans.

The names of the plans are hip, especially Pulsar. According to Wikipedia, a pulsar is “a highly magnetized rotating neutron star or white dwarf that emits a beam of electromagnetic radiation”. While we have reservations about counting on this plan to shine EM waves on us, Pulsar is interesting as it has a minimum premium of SGD300/month, and accepts both SGD and USD. Pulsar holders can also invest in sub-funds, which require considerable more time and expertise (we hope you have a good financial adviser – otherwise we have excellent ones in our curated pool).

However, the names do not truly reflect the nature of their products. We give the score a Pluto/Solar System (or a 0/8).

Prudential

ILP Names

  1. PRULink SuperGrowth Account
  2. PRUSelect
  3. PRULink SuperSaver Account
  4. PRUSelect Vantage
  5. PRUSelect Vantage Premier

fML Comments

Tied with AXA with five plans, Prudential has a variety of linked plans as well. Similar to AXA above, the differences between the plans lie in the comprehensiveness, flexibility, mode of payment, and payment term. For example, PRUSelect Vantage and its Premier brethren is that the former is a regular premium plan whereas the latter is a single-premium plan. However, PRUSelect Vantage has riders available wherease PRUSelect Vantage Premier does not, possibly due to the single-premium nature of the latter. PRULink SuperGrowth and PRULink SuperSaver are both single-premium plans as well, but have relatively lower premium amount compared to PRUSelect Vantage Premier. PRUSelect is a regular premium ILP, with riders for critical illnesses, early critical illness, and premium waivers upon diagnosis of diseases.

We give the naming convention a 3/5.

Aviva

ILP Name

  1. MyLifeInvest

fML Comments

Coming in 1st place for simplest, Aviva has only one ILP. Better yet, the name “MyLifeInvest” is more or less suggests investment from the get-go. Since it is the only ILP from Aviva (for now), the plan is comprehensive and contains most of the features that ILPs from other companies have. For example, rider options for critical illness protection and premium waivers. The naming of this plan gets two thumbs up from us.

NTUC Income

ILP Names

  1. VivoLink
  2. VivaLink

fML Comments

NTUC Income is like the friendly neighbourhood uncle – no-frills, reliable, and simple. Similarly, their offering of their ILPs reflect that. With only two plans, their names are relatively simple and unmistakably ILPs. There’s the word “link” for both plans, which hopefully clues consumers in when they encounter it. Vivolink vs vivalink – what’s the difference? The two are quite similar, except some features. For example, Vivolink has a retrenchment benefit for those who are unable to pay, allowing them to not pay premiums for a while without affecting the coverage. On the other hand, Vivalink allows top-up and withdrawal for the plan.

Tokio Marine

ILP Names

  1. TM Wealth Aspire
  2. TM Wealth Enhancer
  3. TM FlexiAssurance
  4. TM FlexiCover

fML Comments

Tokio Marine’s naming convention is relatively friendly, with two out of the four plans in the list of ILP containing the word “link”. Fun fact: for those with sharp eyes, we actually omitted a product description from the Tokio Marine site called the TMLS Asia Pacific Income Fund. It’s a sub-fund that feeds into the main fund – JPM Asia Pacific Income A (Mth) – SGD.

Conclusion

That’s all we have folks! We hope that our tongue-in-cheek reviews of the list of ILP names brought cheer to an otherwise serious topic. Trust us, we’ve nothing against ILPs, and think that it can be a part of someone’s portfolio. However, it’s equally important to educate consumers on what they’re getting themselves into.

If you ever find yourself needing an awesome financial adviser who won’t suggest ILPs at the drop of a hat, why not head on over to fundMyLife? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

5 Reasons Why You Ended Up With An ILP

Reasons why you end up with an IILP

Ah, investment-linked policies – or ILP for short. You hear them everywhere, be it online or offline. What is it, exactly? ILPs are policies with both investment and protection components. They’re flexible in the sense that they cater to consumers who want both at the same time. However, it’s not for everyone and sometimes you end up with one even thought you didn’t intend to. fundMyLife have written two case studies on users who have asked questions on ILP: here and here.

We must emphasize that we here at fundMyLife are not against ILPs. In fact, we believe that an ILP has a place in one’s portfolio. However, the reasons why it ended up in your possession may not be right. In this article, fundMyLife lists the most common reasons why you might have ended up with an ILP.

#1 You were supporting a friend/family/army buddy

This seems to be a very common reason why you’d end up with an ILP. A friend of yours joined the industry, and looked you up for coffee. Sheepishly, the friend divulges that he/she is in financial planning, and is wondering if you have your finances sorted out. Give him/her a chance to help you, your friend says. You realize you have not sorted out your finances anyways.

Before you know it, you’ve signed for an ILP, thinking that your adviser friend is recommending it in your best interests…until it’s too late. You can’t exactly fault them – these friends/family too might have been sold by the benefits of ILPs, and they sincerely believe in it.

Granted, people nowadays are quite savvy and read up plenty. However, peer and family pressure are still pretty strong. It would take a lot to say no. You should never ever use support as a reason to purchase insurance. If you find it hard to say “no” to every family or friend that approaches you to buy a plan, you’ll end up with a mountain of plans and nary an out in sight.

There is still a large percentage of the population that requires education about the finer aspects of personal finance. With blogs like DollarsAndSense and Budget Babe around, it’s much easier to know what you’re getting yourself into when you sign the dotted line.

#2 You didn’t know any better

The idea of investing, to you, is leaving your money in a bank where the interest rate hopefully beats inflation. Alternatively, you use those new-generation of bank accounts which have relatively high interest rates depending on how much you put in. For example, DBS Multiplier Account or OCBC’s FRANK (we wrote something about the former, by the way).

One day you’re walking in a shopping mall, when a well-dressed lady offers you a free gift in exchange for 5 minutes of your time. What was supposed to be a 5-minute affair became 50 minutes, when you were whisked to a cafe nearby. Another well-dressed individual buys you a drink, and proceeds to explain how you need to “start growing your nest egg now before it’s too late”. The individual also shares with you the pain of a family that loses its sole-bread winner, and rhetorically asks if you want the same to happen to your family.

You shake your head. Before you know it, you’ve an ILP in your possession.

#3 You liked the sound of investment + protection

Doesn’t it sound fantastic? It’s such a flexible plan that allows you to invest and get protected at the same time. We live in a time when we want to have our cake and eat it too. Furthermore, it is a hassle to learn to invest. However, do take note that as you age, premiums for your protection component increases.

It means you’ve less money to be directed at your investment component. It is important to constantly readjust the two components so that the premiums for the protection component doesn’t eat into your investments.

#4 You have no time to invest

You have a 9-5 job, and when you’re done with work you’d prefer to spend time with family or friends, or even binge watch that latest show that you’ve been interested in. As such, you’ve truly no time to invest. Or rather, you have no time to learn to invest. Worse still is when your interest is piqued and you see a seminar offered by a celebrity investor, whose course price ranges in the thousands. You attend the seminar, only to find very sensible advice that’s Google-able, and follow-up courses that costs more. Besides requiring time, investing can be a trying exercise on patience and emotions as well.

As such, when the opportunity to purchase an ILP, you were excited. Depending on the fund chosen, the returns can be high (like 8% high). However, the danger about having no time to invest and having an ILP is that you have no time to monitor your returns as well. Before you know it, you’re chalking up losses because despite the constant request by your financial adviser to meet up to review the performance of your fund, you simply have no time to meet him/her.

#5 You have a good financial adviser, and you know exactly what’s up

You have absolutely no financial discipline, and have a hands-off approach to anything that’s finance related. You are also terrible with money. In this case, you probably need either a savings plan or an ILP so that you save/invest regularly.

When you have an excellent financial adviser who can regularly keep you abreast on fund performance, it’s not a bad idea. A good financial adviser will sit down with you and discuss whether you need to reallocate your funds when your current funds are under-performing. The reallocation of funds is a luxury that other plans like endowment cannot do. Endowment plans are at the mercy of the funds that the insurance companies allocate to.

Conclusion

There we have it, folks! These are the reasons why you might have ended up with an ILP. We have four questionable reasons, and one that’s legit. Once again, we must emphasize that we’ve nothing against ILPs, only those advisers who prescribe this plan for everything and everyone. If you ever find yourself needing an awesome financial adviser who won’t suggest ILPs at the drop of a hat, why not head on over to fundMyLife? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

fML Case Study: The Need For Needs Analysis

fundMyLife ILP case study

Financial planning can be a scary thing – it’s meant to chart your financial adventure for current and future life stages. This also means you’re more or less committed to this plan for years ahead, barring any changes in your life. Most of the time, the financial plan that a financial adviser provides works out well. However, when it doesn’t, it causes regret and feelings of being lost.

Fortunately, it doesn’t have to be this way. That’s where fundMyLife comes in, to connect consumers with questions to the right financial advisers to answer them. In this case study, fundMyLife follows user Elsie* as she asked financial adviser of fundMyLife Roshan Belani of AIA for advice. In the previous fundMyLife case study, Roshan encountered a user who was in a similar quandary and helped resolve his troubles as well.

With their permission, fundMyLife presents to you a case study that highlights the importance of needs analysis.

To hold or not to hold?

Elsie is a young working woman who bought an ILP four years ago. However, a year after she bought the ILP, she had to go overseas to work. Despite that, she maintained the policy for the next three years. At that point, she felt that she can longer continue with the plan and came onboard fundMyLife to seek advice. Since she bought an AIA ILP, fundMyLife’s algorithm once again connected her to Roshan, where they corresponded for a while. She mentioned that she wanted someone unbiased, and thus came to fundMyLife’s portal.(Editor note: looks like we’re doing good on that front).

Roshan first started with a bit of fact-finding. More specifically, he asked about the kind of ILP she purchased. He explained to us that there are several kinds of ILPs in the market, and ILPs can either have both protection and investment, or purely investment. Elsie did not want to confront her original adviser to discuss her plan, which led her to use fundMyLife. Fortunately, he also found out that she had access to the AIA eCare portal, where she was able to examine her policies (and cancel them if need be).

Learning point

If there was a single learning point, Roshan summarized the case study into this: understand your needs for the near and long term. In the case that you are not sure of what your life will be in the future, it is crucial not to commit to long-term plans that take time to mature.

Roshan also stressed the importance of doing a proper needs analysis, as it can help people avoid encountering what Elsie did. If her financial adviser figured out that there was a possibility that she would go overseas for work, she might not have received the recommendation to purchase an ILP. (Editor note: we hope).

He shared that if you’re unable to foresee what your life path is in the near future, he suggests to get a term plan instead. There are 5-year term plans in the market, better suited for those people in transition between locations or life stages.

He also shared that ILPs are more flexible other plans, with stop-gap measures like premium holidays. However, this sort of measure is at best temporary, and should not be used beyond 6 months as it will eat into the value of the policy. Before engaging such plans, it is important to build up enough money to avoid cash-flow problems when paying premiums.

Conclusion

Needs analysis is important, and it goes beyond just calculating the sum assured for the consumer. Call us biased, but online needs analysis tools do not provide the human insights required anticipate possible future events. In needs analysis, uncertainty is as important a factor as certainty.

If you find yourself in the same situation as Elsie, or you’ve questions on financial planning, head on to our main site and ask our curated pool of financial advisers! Alternatively, you can also browse our individual advisers’ pages – just click on their profiles and you can ask them questions directly from their profile pages.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

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*name was altered for privacy